While the government seems to be going for the same
e-auctioning process as in 3G, it would be wise to learn
from the deficiencies in that model
INDER KUMAR

inderk@cybermedia.co.in

1

Pre-qualification Conducted Offline
Constraint: Applications for pre-qualification of bidders were not sent online. Moreover, they were sent by post to DoT, Sanchar Bhawan, 20 Ashoka
Road, New Delhi.
Suggestion: As per CVC’s and DIT’s guidelines for e-tendering/e-procurement, the auctioneer should be able to electronically facilitate the pre-qualification round from the same portal. The same practice should be adopted
in 2G e-auctioning also. “The pre-qualification part of the proposed 2G
auction sale should also be handled through the e-tendering methodology,
as even e-tendering is now being made mandatory by the government for
all tenders above `10 lakhs in value,” says Jitendra Kohli, a pioneer and
expert in the area of e-procurement and e-auction.

2

Confidential Info Given to Third Party

3

Constraint: “..all confidential information contained within the Electronic
Auction System will be accessible only to staff at DotEcon for the purposes of
ensuring the smooth...”—As given in Notice Inviting Applications dt. February
25, 2010 by the department of telecommunications (DoT). The confidential
information was handed over to DotEcon (a London-based consultant) who
was an advisor to execute the 3G e-auction. The prerequisite can be irksome
as the information can be easily exchanged without any monitoring.
Suggestion: Government officials should be effectively trained for conducting
online auctions so as to not to remain dependent on advisors and not give out
any information to the third/private party.

Security Not Prioritized
Constraint: In the latest RFP issued by DoT, security has been given the
least weightage. ‘E-security aspects in design and conduct of the auction’
remain to be only 10% of the total parameters in the bid.
Suggestion: Other than focusing on reserve price, the Trai and Telecom
Commission should also give a right of way to the security concerns, as
the auctioning process involves third party as a consultant and huge money
flows in by the bidders.

26 | July 15, 2012

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DATAQUEST | A CyberMedia Publication

After the successful auction of 3G licenses, the
2G spectrum auction has become the top priority
for the department of telecommunications (DoT).
The government seems to be implementing the
same method of e-auctioning as adopted for 3G.
Although the method brought out an appreciable
price for 3G, there were some anomalies that
need to be reviewed. An improvement in the
deficiencies will benefit the exchequer and also
improve telecom penetration. Now when the
schedule is tight, the DoT may consider the
following while finalizing the auctioneer for the
2G spectrum resale.

4

Third Party Audit Not Conducted

Constraint: According to a report in The Hindu dated April 14, 2010,
“CVC had suggested that the DoT should conduct a third-party audit
on the auction process to ensure transparency in compliance with the
Commission’s guidelines for e-commerce platforms. However, the DoT
has taken a view that such an audit was not mandatory.”
Suggestion: E-auction, as in case of spectrum sale, also involves lakhs
of crores and is in the same generic category as e-tendering and eprocurement; it is therefore logical that e-auction systems should also
be similarly certified and audited.

5

Multi-round Process: Best Price Not Extracted

Constraint: In the ‘3G Spectrum Auction’ process, price enhancement in any
given round was dependent only on acceptance by bidders of the Auctioneer’s
‘Reserved-Price’. In effect, this may not extract the best price from the bidders.
Suggestion: The methodology should have an element of ‘Competitive Bidding’
added in each round of the e-auction process. This will eliminate, or drastically
reduce, the large number of auction rounds and will extract the best market
driven price.